Peppermint Innovation Secures $3M Funding, Navigates Cybersecurity Setbacks
Peppermint Innovation Ltd has bolstered its financial position with a $3 million convertible note while navigating a challenging quarter marked by cybersecurity disruptions and strategic divestments. The company is poised for recovery with new advisory expertise and enhanced payment integrations in the Philippines.
- Secured AUD$3 million convertible note from Obsidian Global GP LLC
- Divested PINT subsidiary to recoup acquisition and operational costs
- Cybersecurity measures led to 23% revenue decline but protected customer funds
- Innovation Advisory Board formed with Microsoft’s Shashank Pawar appointed
- Integration of InstaPay, PESONet, and RTGS fund transfers scheduled for Q1 2025
Financial Strengthening Amid Operational Challenges
Peppermint Innovation Ltd (ASX:PIL) has taken decisive steps to reinforce its balance sheet by securing a convertible note facility worth up to AUD$3 million from Obsidian Global GP LLC. This funding arrangement, preferred over an equity raise to protect shareholder value amid undervalued share prices, provides the company with essential liquidity to support its core operations in the Philippines.
The initial tranches totaling $1 million have already been drawn down, with further tranches available subject to mutual agreement. This financial cushion comes at a critical time as Peppermint navigates a complex operational landscape.
Strategic Divestment and Advisory Board Formation
In a strategic pivot, Peppermint divested its Peppermint Intelligence Limited (PINT) subsidiary for GBP235,000, effectively recouping all acquisition and operational costs incurred since December 2023. The sale eliminates significant ongoing expenses, including $278,520 in costs over just two months, allowing the company to focus resources on its core fintech platform in the Philippines.
Complementing this refocus, Peppermint established an Innovation Advisory Board chaired by Neal Cross, with the appointment of Shashank Pawar, Microsoft’s Director of Data Modernisation for APAC, signaling a commitment to leveraging cutting-edge AI and data technologies. This board is set to steer the company’s AI-powered credit scoring and loan automation initiatives, which are critical for scaling microfinance services in the region.
Cybersecurity Challenges and Operational Resilience
The December quarter was marked by industry-wide cybersecurity threats impacting the Philippines fintech sector, including the leading mobile payment platform GCash. Peppermint responded proactively by implementing voluntary system downtimes to safeguard customer funds, resulting in a 23% decline in bizmoto revenue for the quarter. Importantly, these measures prevented any unauthorized transactions or losses, underscoring the company’s prioritization of security and customer trust.
Post-incident, Peppermint has upgraded its AWS infrastructure to enhance security, resilience, and scalability, preparing for evolving cyber threats in 2025. Early signs of recovery are evident, with transaction volumes and revenues beginning to rebound as confidence returns to the market.
Growth Initiatives and Payment Integration Progress
Peppermint’s partnership with MASS-SPECC continues to expand, with the Pinoy Coop Mobile (PCM) app registrations surging 237% since the previous quarter, now reaching over 11,000 users. The company is enhancing the app with new features such as QR code registration and real-time push notifications to improve user engagement and cooperative administration.
On the payments front, Peppermint Bizmoto Inc. has secured PPMI accreditation and is progressing with direct integration into the Philippines’ national payment infrastructure, including BancNet’s InstaPay, PESONet, and the BSP’s RTGS system. The InstaPay integration is on track for a Q1 2025 launch, promising faster, more reliable, and cost-effective fund transfers for users.
Outlook and Market Positioning
Despite a 23% quarterly revenue dip, bizmoLoan demonstrated robust growth in core Gold level loans, increasing 26%, offsetting declines in micro loans affected by cybersecurity-related service suspensions. The company is implementing strategic initiatives to boost loan approvals, including expanding its sales force and introducing performance incentives.
With a strengthened financial position, enhanced cybersecurity, and a new advisory board focused on AI-driven innovation, Peppermint is well-positioned to capitalize on the growing fintech market in the Philippines. The company’s focus on digital-first and hybrid services through cooperative networks aims to address financial inclusion for millions of underserved customers.
Bottom Line?
Peppermint’s strategic funding and innovation focus set the stage for a resilient rebound in 2025, but cybersecurity vigilance remains paramount.
Questions in the middle?
- How will the Innovation Advisory Board’s AI initiatives impact loan performance and credit risk?
- What is the timeline and expected user adoption rate for the new payment integrations?
- How sustainable is the recovery in bizmoLoan revenue amid ongoing fintech cybersecurity risks?